DRS: IP 92(2.3), Connecticut State Income Tax Information for Military Personnel and Veterans

 

STATE OF CONNECTICUT
DEPARTMENT OF REVENUE SERVICES

450 Columbus Blvd
Hartford CT 06103

This Informational Publication has been modified and
superseded by IP 92(2.4)

IP 92(2.3)

Connecticut State Income Tax Information for Military Personnel and Veterans


Purpose: If you are a member of the armed forces in active service, you may have some questions about filing a Connecticut income tax return.

This publication explains who is a Connecticut resident and who is a Connecticut nonresident. It also explains how to file a Connecticut income tax return.

In general, a resident is anyone who is domiciled in Connecticut. However, a person domiciled in Connecticut who meets certain conditions may be a nonresident for Connecticut income tax purposes.


Domicile and Permanent Place of Abode: To determine your resident status for state income tax purposes, you must consider where your domicile was prior to entering the military and where you maintained a permanent place of abode during the taxable year.

Your domicile is the place that you intend to have as your permanent home. It is the place you intend to return to whenever you may be away. For income tax purposes, your domicile is the state where your permanent home is located.

You can have only one domicile. Your domicile does not change until you move to a new location and definitely intend to make your permanent home there. If you move to a new location but intend to stay there only for a limited amount of time (no matter how long), your domicile does not change. Military assignments do not generally affect your domicile.

A permanent place of abode is a residence (a building or structure where a person can live) that you permanently maintain, whether or not you own it, and usually includes a residence your husband or wife owns or leases. A place of abode is not permanent if you maintain it only during a temporary or limited period of time for a particular purpose (e.g., a temporary duty assignment).

Barracks, quarters on a ship, or any structure that contains only bachelor-type quarters and not facilities ordinarily found in a dwelling, such as facilities for cooking and bathing, will generally not qualify as a permanent place of abode.


Resident and Nonresident Defined: A resident is anyone who is domiciled in Connecticut or who is domiciled elsewhere but maintained a permanent place of abode in Connecticut and spent more than 183 days in Connecticut in the taxable year.

NOTE: An individual who is in the armed forces and is stationed in Connecticut but who is domiciled elsewhere does not become a resident of Connecticut even though he or she spends more than 183 days in Connecticut in the taxable year.

If your domicile was Connecticut when you entered the military, your domicile does not change unless you have voluntarily abandoned your Connecticut domicile, established a new domicile in another state, and taken necessary actions to change your legal home of record with the armed forces. You are a resident and must file a resident return and pay any tax due unless you meet all three of the following conditions for the entire taxable year:

1. You did not maintain a permanent place of abode in Connecticut;

2. You maintained a permanent place of abode outside Connecticut;

and

3. You spent 30 days or less in Connecticut.

If you meet all three conditions, you are a nonresident of Connecticut for the taxable year and do not have to file a resident income tax return. If you have any income from Connecticut sources, however, you may owe Connecticut income tax and may have to file a nonresident income tax return. Read the next section for further information on the nonresident tax. Review the following examples:

Example 1:

Steve was a resident of Connecticut when he joined the Army and has not established a new domicile. He does not maintain a permanent place of abode in Connecticut. He visited his parent's home in Connecticut for only two weeks in the taxable year. He lives in bachelor-type housing at his permanent duty assignment in Texas.

Steve is a resident for Connecticut income tax purposes because bachelor-type housing does not qualify as a permanent place of abode.

Example 2:

Moira was a Connecticut resident when she entered the Navy and has not changed her resident status with the military. Her permanent duty assignment is San Diego, California. For all of the taxable year she rented an apartment. She did not visit Connecticut in the taxable year and she does not have a permanent place of abode in Connecticut.

Moira was a nonresident for the taxable year. An apartment or house rented or owned for the entire taxable year at a permanent duty assignment qualifies as a permanent place of abode outside Connecticut.

Example 3:

Same facts as in Example 2 but in the next year, Moira is temporarily assigned to a naval base in Florida for advanced training. She gives up her apartment in San Diego and rents a house near the base in Florida.

Moira is a Connecticut resident in that taxable year. A place of abode is not permanent if it is maintained only during a limited or temporary period or for a particular purpose.


Nonresident Members of the Armed Forces: If your domicile was not Connecticut when you entered the military and you were later assigned to active duty in Connecticut, you do not become a Connecticut resident even if you maintain a permanent place of abode here. You are a nonresident and your military compensation is not subject to Connecticut income tax.

However, other income that you receive from Connecticut sources while you are a nonresident may be subject to tax. If you have a civilian job in Connecticut during your off-duty hours, the income you receive is subject to Connecticut income tax. Income or gain received by a nonresident from property located in Connecticut or from a business, trade or profession carried on in this state is also subject to tax.

The spouse of someone in the military may be considered a resident of Connecticut even if he or she is domiciled in another state. If the spouse has a permanent place of abode in Connecticut and spends more than 183 days in the state in the taxable year, he or she is a resident for Connecticut income tax purposes.

Example 4:

Bob and Sue are domiciled in Florida. Bob enlisted in the Navy in Florida, was stationed in Groton, Connecticut and moved here with Sue, his wife. They lived here for 8 months in the taxable year. He earned $38,000 in military pay.

A. They had no other income. Military personnel are residents of the state in which they resided when they enlisted. Since Bob resided and enlisted in Florida, he is not considered a resident of Connecticut and does not have to file a Connecticut return.

B. Bob had a part-time civilian job in Connecticut from which he earned $10,000. His civilian income is Connecticut source income and is subject to Connecticut income tax. He must file Form CT-1040NR/PY, Connecticut Nonresident or Part-Year Resident Return.

C. Sue had $29,000 in wage income and $1,000 in interest income for the taxable year. Because she has lived in Connecticut for more than 183 days in the taxable year, she is a resident and must file Form CT-1040, Connecticut Resident Income Tax Return, and report all her income whether or not it is from a Connecticut source.

Example 5:

John is domiciled in Connecticut but he is stationed in Texas and meets all three conditions of Connecticut nonresidence. He sold property in Connecticut during the taxable year on which he recognized a capital gain. He must file a nonresident return, Form CT-1040NR/PY, because income from the sale of property in the state is Connecticut source income.


Part-Year Residents: If you change your domicile from Connecticut or to Connecticut during the taxable year, you are a part-year resident for the taxable year. A part-year resident is subject to tax on all income earned during the resident portion of the year and on income from Connecticut sources during the remainder of the year.

For more information about Connecticut nonresident and part-year resident income tax, order Form CT-1040 NR/PY by calling the number for forms listed on the last page of this publication. Connecticut tax forms are also available in town libraries, many banks and post offices.

Resident Members of the Armed Forces: If you are a Connecticut resident in the military and you meet either of the following conditions for a taxable year you must file a resident return using Form CT-1040 or Form CT-1040EZ:

  • You had Connecticut income tax withheld or made estimated state income tax payments;

    or

  • Your federal gross income (plus any income that is federally exempt, but subject to Connecticut income tax) exceeds:

$12,000 for a Single person or a Married person filing separately

$19,000 for a Head of household

$24,000 for Married persons filing jointly.


Taxability of Military Pay for Residents:

If you are a Connecticut resident, your military pay or your military pension is subject to Connecticut income tax to the same extent that it is taxable for federal income tax purposes.

Disability pensions and any other benefits granted for the relief of injuries or disabled veterans, as well as tuition payments, subsistence allowances and any other benefits paid to, or on account of, a veteran or beneficiary under the laws relating to veterans, are treated the same for Connecticut income tax purposes as for federal income tax purposes. If these amounts are excludable from gross income for federal income tax purposes, they are not subject to Connecticut income tax.


Withholding and Payment of Estimated Income Tax: If you are a Connecticut resident, your military pay is subject to withholding of Connecticut income tax. You should complete Form CT-W4, Employer's Withholding and Exemption Certificate, and provide it to your military finance officer. However, if you will meet the conditions for nonresident status in the taxable year, you can request that no Connecticut income tax be withheld from your pay by checking the exemption box on Form CT-W4 and filing it with your military finance officer. Do not send Form CT-W4 to the Department of Revenue Services. Form CT-W4 is available from your military finance officer.

If you expect to owe more than $200 in Connecticut income tax after subtracting Connecticut income tax withheld during the taxable year, you should make estimated income tax payments or increase your Connecticut income tax withholding. Request IP 92 (9.3), Is My Connecticut Withholding Correct?, or IP 92 (5.6), Estimated Connecticut Income Taxes. Estimated income tax payments are made using Form CT-1040ES, Estimated Connecticut Income Tax Payment Coupon.


Requesting a Refund: If you are domiciled in Connecticut but meet all three conditions for nonresidence, you must file Form CT-1040NR/PY to claim a refund of Connecticut income tax withheld in error. You must attach an explanation that contains the following:

  • A statement that you did not have a permanent place of abode in Connecticut during the taxable year;

and

  • The location and a brief description of the permanent place of abode you maintained outside Connecticut and the beginning and ending dates of your stay there;

and

  • The exact number of days you were in Connecticut during the taxable year.

If you are a resident you must file Form CT-1040 or Form CT-1040EZ if the amount withheld from your pay or the amount paid in estimated tax is more than the Connecticut income tax you owe. (Nonresidents file Form CT-1040NR/PY to claim a refund under these circumstances.)


When to File Your Return: As a member of the military you must file your Connecticut return at the same time and in the same manner as any other taxpayer. File your return as soon as you can after the end of the taxable year, but no later than April 15, of the following year. (If you file for a fiscal year other than the calendar year, your return is due by the 15th day of the fourth month following the end of your fiscal year.)


Extension of Time to File Returns: If you cannot meet the April 15 deadline and need to extend the time for filing your return, you must use Form CT-1040EXT, Application for Extension of Time to File. The time to file your return will be extended six months. File Form CT-1040EXT on or before the due date for filing your return to get an extension of time to file. Your Form CT-1040EXT must be accompanied by full payment of tax due. Penalty of 10% of the underpayment and 1% per month (or fraction thereof) will apply to underpayment of tax.

U.S. Citizen Living Abroad: If you are a U.S. citizen or resident living outside the United States and Puerto Rico, or in the armed forces of the United States serving outside the United States and Puerto Rico, and are unable to file a timely Connecticut income tax return, you must file Form CT-1040EXT and pay the amount of tax you owe on or before the original due date of the return. Include with Form CT-1040EXT a statement that you are a U.S. citizen or resident living outside the United States and Puerto Rico, or in the armed forces of the United States serving outside the United States and Puerto Rico, and that you qualify for a federal automatic two-month extension of time to file. If your application is approved, the due date will be extended for six months (October 15 for calendar year filers). If you are still unable to file your return and you have applied for and been granted an additional extension of time to file for federal purposes using federal Form 2350, you may also file your Connecticut return using the federal extension due date but you must attach to the front of your Connecticut return a copy of the federal Form 2350 approval notice.

Combat Zone: The Connecticut income tax return of any individual in the U.S. armed forces serving in a combat zone or injured and hospitalized while serving in a combat zone shall be due 180 days after returning. There will be no penalty or interest charged.

Combat Zone is an area designated by executive order of the President of the United States as being a combat zone.

A combat zone also includes an area designated by the federal government as a qualified hazardous duty area. Therefore, an individual serving in the peacekeeping efforts in Bosnia and Herzegovina, Croatia or Macedonia, is eligible for the 180 day extension due to individuals serving in a combat zone. When the income tax return is filed, the individual should print "Bosnia-Operation Joint Endeavor" at the top of the form.


Death of Military Personnel: When a member of the military dies while on active duty in a combat zone or as a result of injuries received while serving in a combat zone, all income taxes are waived for the taxable year of the death and for any prior taxable year ending on or after the first day the deceased served in that combat zone. No income tax returns have to be filed for the deceased or the estate for these years. If the deceased paid any tax while in the combat zone, the full amount of the tax paid will be refunded to the estate or surviving spouse provided a return is filed to claim the refund. If any tax was assessed but not paid, the assessments will be canceled.


Related Forms and Publications:

Request the current edition of the following forms and publications:

IP 92(5.6), Estimated Connecticut Income Taxes
IP 92(9.3), Is My Connecticut Withholding Correct?
Form CT-1040ES, Estimated Connecticut Income Tax Payment Coupon
Form CT-1040, Connecticut Resident Income Tax Return and Instructions
Form CT-1040EZ, Connecticut Resident EZ Income Tax Return and Instructions
Form CT-1040NR/PY, Connecticut Nonresident or Part-Year Resident Income Tax Forms and Instructions


Effect of This Document: An Informational Publication (IP) is a document that addresses frequently-asked questions about a current Department position, policy or practice, usually in a less technical, question-and-answer format.


Effect on Other Documents: IP 92(2.2), modifies and supersedes IP 92(2.1) which may no longer be relied upon on or after this date.


FORMS AND PUBLICATIONS: Forms and publications are available all day, seven days a week:

  • Internet: Preview and download forms and publications from the DRS Web site: http://www.ct.gov/drs
  • Telephone: Call 860-297-4753 (from anywhere), or 1-800-382-9463 (toll-free within Connecticut) and select Option 2 from a touch-tone phone.


IP 92(2.3)
Income Tax
Issued: 1/3/97
Replaces: IP 92(2.2) (Issued 12/7/95)